Air Pollution:

With the Senate Environment and Public Works Committee less than a week away from a markup on a major Clean Air Act bill, OnPoint turns to two Washington insiders with far different perspectives to debate the legislation. Clean Air Watch's Frank O'Donnell and Scott Segal, an industry lobbyist representing some of the nation's largest electric utilities, give their perspectives on the prospects for President Bush's Clear Skies initiative on this show, hosted by E&E Daily senior reporter Darren Samuelsohn and E&E daily editor Colin Sullivan.

Transcript

Colin Sullivan: Welcome to OnPoint. I'm Colin Sullivan. Today we're joined by Frank O'Donnell, the director of Clean Air Watch, and Scott Segal, an industry lobbyist representing some of the largest power companies in the country, to talk about Clear Skies. Also with us is Darren Samuelsohn, senior reporter for E&E Daily and Greenwire. Mr. O'Donnell I'd like to start with you. If you had one minute to talk to a swing vote on the EPW Committee to justify your position on Clear Skies, how would you defend?

Frank O'Donnell: Well, I don't think I'd be defending a position at this point I'd be pointing out a few facts. One is that the Clean Air Act is working very well. Even the biggest critics will point out that the air is getting cleaner over the course of time even while we're burning more coal, we've got more people, we're having a lot of economic growth, so the law is working great. It's not broken. We don't need to make any kind of radical change to it. In terms of the legislation that's been proposed by the administration it really is a rollback. It undercuts state authorities. It undermines attempts to clean up the air. It means people are going to breathe dirtier air for a longer time. We don't need it. There are authorities in current law to keep making the air cleaner, so there's absolutely no reason for the kind of legislation that's been proposed, except to cut breaks for some of the big polluters and that's really what it is. It's really corporate America's air pollution plan.

Colin Sullivan: Mr. Segal, how would you counter that?

Scott Segal: Well, I'd say that first of all, first things first. The Clear Skies bill is a 70 percent reduction in sulfur dioxide, oxides of nitrogen and mercury, and I would say that as far as the current Clean Air Act is concerned, the current Clean Air Act adopts, unfortunately, with respect to stationary sources, existing stationary sources, adopts a litigate first ask questions later approach. It's become hopelessly mired. It has not produced results. One of the greatest fictions I would try and blow away if I had a minute with a swing voter is that somehow full enforcement of the current Clean Air Act exceeds the emissions reductions in the Clear Skies Act. This is certainly not the position the environmental movement, whether it be at the time, Environmental Defense Fund or the National Resources Defense Council or others took prior to the adoption of the 1990 Clean Air Act amendments that included the acid rain reductions. There they said the existing authorities within the Clean Air Act, including the new source review program, are not emissions reductions programs and are not capable of making emission reductions for the next generation of facilities. That's why they advocated at that time the cap-and-trade program that became the acid rain program. That is the history of this program and this is the natural next step follow on. We shouldn't let the perfect to be the enemy of the good. Just because the Clear Skies program doesn't make as deep of reductions as some in the environmental community would like it to make, or perhaps doesn't include carbon dioxide for example, is not a reason not to take those 70 percent reductions off the table, go ahead and go for it and make those significant reductions. It's next-generation follow on to a successful program.

Darren Samuelsohn: We've got a markup coming up very soon here on this, and I'm curious to get your opinions. There was a report today that we reported today in E&E Daily and Greenwire that some movement has been made to try and get a compromise on this. Senators Voinovich and Inhofe offered something to Baucus, Chafee, Carper, people who could be swing voters. I'm wondering, do you think that we're going to see more of this as we get closer to the markup on February 16? How much behind the scenes work is going on right now?

Scott Segal: I think there's a legitimate, I'd be interested hear what Frank says about it, but I think there is a legitimate concern, particularly on the part of Senators Voinovich and Inhofe, to try and come up with a compromise as time goes on. Now areas that I would hope we don't see compromise on are those that would push the actual emissions timetable reductions and the levels of reductions even further and I'll tell you why. At 70 percent reductions in the currently proposed Clear Skies Act we're pretty much at the limit of technological feasibility, if we push much beyond that, all that's left is fuel switching away from the 55 percent of electric generating capacity currently with coal and toward things like natural gas which are already at high costs and in scarce supply. To do that is to increase the price structure for those in society that are least able to afford it, the elderly, the poor, those living on fixed incomes. So we really have some significant societal choices to make if you try and go beyond 70 percent. I hope that's not in play, but other parts of the bill definitely may be in play.

Frank O'Donnell: Well, I think first of all since we're talking about people's health, we ought to point out that tens of thousands of people are dying every year, prematurely, because of air pollution from power plants and other big sources of pollution that might be affected by this legislation and one of the major purposes of this legislation, according to some industry analysts, are to postpone the emission reductions, in other words, to let the polluters keep polluting longer and more. That's industry analysts saying this, that's not me saying it. Now that means that people are gonna keep suffering, they're gonna get sick, they're gonna die, if we keep delaying the pollution reductions. I think we can go much faster under current law, than the plan we've got here and I think we can go a lot deeper under current law and so do a lot of other people. A lot of the state government agencies oppose this legislation. The Association of State and Local Air Pollution Control Officials came out and panned it. They said we'd much rather have current law than this. The Northeastern state environmental commissioners are all opposed to it. The ozone transport commissioners are opposed to it. So all of the state government officials who actually working this field say this is a turkey. They understand, they wouldn't put it this way, but it's a no polluter left behind kind of bill. I mean, it really is the corporate pollution plan. It's one that's gonna mean more health damage, more people getting sick, more people dying early than if we enforce the current law. In terms of the compromise that you talked about, or the alleged compromise, I think this is them essentially admitting that this is a polluter protection bill and that they're weak. That they can't get the votes for it because too many people have jumped on board, tried to get a special deal like the pulp and paper people, like the industrial boiler people, they were all gonna get a break. They were going to get out from under toxic air pollutant requirements the way the bill that's been introduced and so far that's the only bill out there.

Darren Samuelsohn: Let's try and parse this down a drop more. Is this the debate over global warming climate change? Or is this a debate as, environmentalists have recently really started to go after some of the regulatory reform pieces of the Clean Air Act and saying that there's additions to the bill that they disagree with and almost trying to separate this from the global warming climate change CO2 piece.

Scott Segal: I think one track of criticism is on global climate change, but I think another track of criticism has been on some of the regulatory issues that Frank was referring to behind some of the rhetoric.

Darren Samuelsohn: What's your response on the regulatory reform?

Scott Segal: Yeah, let's talk about that for a second. First of all, everyone agrees that it would be good to get as many different industrial point sources of air emissions into the bill as possible to make those serial reductions. That would be great. We call that opting into the bill. Now in exchange for opting into the bill, of course, you would expect that --

Darren Samuelsohn: What are some of the industries actually?

Scott Segal: Well there are 22 different industrial sectors and those would include everything from chemicals and petrochemicals, petroleum refining, paper, as Frank mentioned, etc., etc. Any industrial sector that operates industrial boiler might potentially be interested in opting in, but obviously, you're not going to opt in if every single air pollution authority, that's currently within the Clean Air Act, continues to apply to you. That would be like hitting yourself with a frying pan in the head twice. There would be no incentive to opt in, so we have to create a valid system whereby there's incentive to opt in. Now the argument is made, by Frank and others, that too much is given away for one of these facilities to opt in, but let's keep our eye on the ball. The first thing that happens when you opt in is a commitment to a cap that eventually results in a 70 percent emissions reduction. That's absolutely completely on the table. Now, beyond that you may not have to comply with the so-called maximum achievable control technology standard for boilers, which we call colloquially, the Boiler MACT, might not have to comply with Boiler MACT, but the fact of the matter is, if the environmental community just loves Boiler MACT, they have a very funny way of showing it. When they lobby on Clear Skies they say, "Oh don't let them out of Boiler MACT. It's a great rule." And then later they sue on it and say, "Oh it's a terrible rule. How dare you adopt it?" This is the to-and-fro we hear from the environmental community. The fact of the matter is that rule is already subject to administrative reconsideration by the Environmental Protection Agency. The same kind of technological fixes that one would expect from an industrial boiler in complying with the Clear Skies standards of the types of things they would be doing under Boiler MACT, so you get the same net emissions reductions even for those types of emissions that go beyond the criteria air emissions and go into such things as hazardous air pollutants. And lastly, there's a health based proviso within the Boiler MACT that allows you to get out of compliance for some of those hazardous air pollutants, so they're not even saying that if we stuck with the much vaunted existing law it would actually address all these particular hazardous air pollutants. All in all, the most predictable, most significant and even historic reductions that have been proposed certainly since 1990 and really since before then, are the Clear Skies suite of package and that's what ought to be adopted. That's what gets us actual emissions reductions.

Frank O'Donnell: Could I respond to one thing that's come up now a couple of times and it's this, what I consider, a bit of a red herring about lawsuits and how we're litigation crazy. My recollection is that most of the lawsuits are actually being brought by the electric power industry anytime they're asked to clean up. When the EPA set tougher standards for smog and soot, who sued? The electric power industry. Why? Because they didn't want to have to clean up. What happened? We got delays and uncertainty. When the EPA set standards to require summertime smog reductions on the East Coast, the so-called NOx SIP Call, who sued? The electric power industry. Why? They didn't want to have to spend money to clean up. What happened? We got delayed. When the EPA set standards for visibility improvement regional haze, who sued? The electric power industry messed up everything. I mean, so this claim about, gosh it's so terrible. There's so many lawsuits is kind of crying wolf. I mean it's the electric power industry itself is the one that's mainly going to court anytime they're asked to clean up.

Scott Segal: I think Frank's talking about the wrong kind of litigation here. Here's the deal, if you adopt a cap-and-trade program as we did in 1990 with the acid rain program the record of post-adoption litigation that's needed to wring additional emissions reduction is terrific with respect to the acid rain program. There isn't a need for continual revisiting to court, continual relitigating the issue, a cycle of perpetual regulatory review and perpetual litigation. By contrast, when the environmental community talks about "full enforcement of the Clean Air Act", what they're talking about, in no uncertain terms, is the New Source Review program, which is a very litigation heavy program. It goes in a case-by-case analysis, so it only stands to reason that you cannot predictably rely on emissions reductions across-the-board. Now as far as these lawsuits that were pre-implementation, the ones on the rules, that's what Frank's talking about. Look, even if the style of the case has industry suing the EPA, I guaran-darn-tee you, and I think that's a word we can say in this broadcast, I guaran-darn-tee you that the environmental community intervenes in every one of those lawsuits. We may have an interest, they may have an interest, but both interests are vindicated in this lawsuit.

Colin Sullivan: If we could change the tack a little bit. The political reality right now on the Hill seems to be with absent a deal on carbon dioxide, Clear Skies is not going to get out of the EPW Committee and they're not going to get 60 votes on the floor if they bring it straight to the floor. What is the political reality and what's the middle ground on CO2? Is there a middle ground somewhere between, say John McCain's bill and Hagel's bill on climate change, that they might find a way to get Clear Skies out of committee?

Frank O'Donnell: Well, I think I would differ little bit that CO2 is the only thing holding this up. I mean, Harry Reid said yesterday, in the piece that you all reported, that this bill is a rollback of the Clean Air Act so Harry Reid, the Senate majority leader is not talking about CO2, he's pointing out the reality that this is a step backwards. This is a bill that's going to hurt.

Colin Sullivan: But still they might get Baucus and Chafee on board if they were able to find some sort of compromise on CO2 and move it onto the floor out the committee.

Frank O'Donnell: Well, it's not clear that that would happen. They have outlined their concerns including CO2, but, by gosh, they're not the only ones that we know they're concerned about. They talked about it in their statements, that they want to see the law enforced properly and they want to, in Baucus' case, make sure he's got a market for Montana Coal, all of which I think can happen under current law. Just so, to correct the impression that CO2 is the only issue here. It's really not. I think the biggest issue here is whether we're going to weaken the Clean Air Act or not. In terms of CO2 and compromises, I honestly don't know what's going to happen. I don't think the bill is going to go to the floor. Right now I think this bill is like a dead mouse on the kitchen floor. It smells bad. The only question is when are they going to put it in the trash can and close the lid? I think that's going to happen soon.

Colin Sullivan: Is that true? Is it a dead bill?

Scott Segal: No, I don't believe so. In fact I think these are exciting times for reform of the Clean Air Act. We're going to see action on Clear Skies. Here's the question, there are couple of relevant questions in what you say. The first is, what about CO2? Is it a necessary predicate to get the bill out? I guess on that Frank and I may agree. I don't, I don't believe it is a necessary predicate or certainly the only predicate needed to get the bill to move forward. I think it's an open question whether a senator like a Max Baucus or even like a Lincoln Chafee need to have a fully completed "deal" on carbon before the bill can move out of committee. I mean, I'm not saying that it is or it isn't, but I think it's an open question even still. Another question is, assuming that the legislation does, is held captive to the larger politics of what I would call climate politics, there are other ways to give outlet to that larger debate. For example, Senator Hagel is working on his climate bill right now and it could be that there, that that bill may also precedes the floor of the United States Senate and give people an outlet to vote on, vote their conscience on climate issues, while not encumbering a 70 percent reduction in NOx, SOx and mercury, so that would be a good thing to do. The other thing is, and I hate to bring things like this up, it's a little bit of inside baseball I guess, but it's also possible that if, if the committee were hopelessly deadlocked there are other ways to move clean air legislation.

Frank O'Donnell: Rule 14 is what you're talking about.

Scott Segal: Well, let's talk about some of those. One, you could Rule 14 it, as they say down here in Washington. What does that mean? It means to, it means to use a procedure whereby you do not, you discharge the bill essentially from the committee and it goes directly to the Senate floor. It's controversial. It's not something people like to do every day, but it is, it is a possibility. Another possibility is the Clear Skies travels on an amendment to another piece of legislation that is definitely moving. There was some talk, awhile back, about potentially putting it on the energy bill, but I'm not, I couldn't even begin to speculate. That brings a whole other question about what the energy bill's politics are, but there are other pieces of legislation that we know for certain will move.

Darren Samuelsohn: Transportation bill as well?

Scott Segal: Transportation bill, the budget, all of these legislation may move and it just depends on how high of a priority leadership wants to make Clear Skies. If they want to make it a very, very high priority, they can put it on a fast moving train and it will get passed.

Colin Sullivan: They still don't have 60 votes though right?

Frank O'Donnell: I don't think they're anywhere near 60 votes at this point. I'm not convinced they've even got over 40 at this point, for something like this.

Scott Segal: Of course you don't need 60 votes if it's on the budget, because no one is going to --

Colin Sullivan: So you're talking about doing it through reconciliation? I don't --

Frank O'Donnell: I'd like to say something, not interrupt, but, the reality, the reality is that the majority leader Senator Frist didn't even include this on his top 10 list of legislative priorities. He wouldn't want this to come up at all unless there is some kind of, you know, consensus I think within the committee or at least among the committee members. I don't think he is gonna risk it. Why would, why on earth with all the other pending priorities that they have to deal with in the Senate like Social Security and people suddenly maybe realizing that the budget that's been submitted by the administration is a hoax and a fraud because it didn't include Iraq spending and things like that? Why would they bring up something like this that is going to be portrayed, accurately in my view, as an attempt to weaken the Clean Air Act on behalf of big corporations? The answer is, they're not gonna do it.

Scott Segal: Of course even after Frist established the top 10 the President then gave a State of the Union Address and spoke, in what I consider to be, pretty good detail and relatively glowing terms about both his environmental and energy priorities. So I wouldn't read too much into what gets S1 though 10.

Darren Samuelsohn: How much time does the administration have to get this into law this year with midterm elections a year and a half, two years away and people often say that nothing really happens in the second two years of the second term for a president?

Scott Segal: Well I think that there are a lot of, it's a good, it's a really good question, I think there are a lot of temporal constraints on what happens with clean air legislation. One of those is the political one that you discussed, which is, you know, people's minds begin to drift after awhile. You know a chamber like the U.S. Congress isn't known for being able to focus its attention for long periods of time, particularly on technical legislation, so that is problematic. The other problem too is there are pending court cases, there are pending regulatory deadlines and if you begin to adopt, you know, a major and comprehensive regulatory scheme it can take some of the steam away from legislative developments. I'm never one that reads too much into that because even if industry promised it would never bring another lawsuit, we just divested ourselves of all of our legal remedies, I know that the environmental community will sue over both the clean air implementation rule and the mercury rule so that even if the EPA were to conclude finally it's regulatory authority, I'm certain the environmentalists would gum that up enough to where the certainty in legislation would still be needed.

Darren Samuelsohn: Let me just ask you one question, stepping back a drop, and if you could give kind of, you know, answers, I'm kind of curious, we're 15 years after the 1990 clean air act amendments, the difference between then and now, how come they were able to move a bill, pretty unanimously, I mean, there was some objections but clearly there was a push to get this thing through in 1990. What's the difference between then and now and are there any lessons to be learned from 1990?

Scott Segal: Well, I'd be interested to hear Frank's views on that. I will give you an uncharacteristically short answer, which is that unfortunately, so much of what Washington does has become increasingly very partisan and I don't blame either party for that. I blame both parties for that and as a result it's very difficult to legislate on almost any topic at this point in time. Environmentalism, environmental issues are no different, in fact, in many respects they're even more. They've, unfortunately, become quite polarized when, in fact, they used to be consensus items. I don't, you know, there are a lot of reasons for that, everything from direct-mail and advertising to just the general degree of breakdown of civility and all kinds of reasons that make it difficult pass legislation.

Frank O'Donnell: I'll surprise everybody and agree with Scott. That, in fact, I think that's exactly right and the history of this law and working in that Senate committee in particular, is that they all worked collegially, 1970, 1977, again in 1990 to try to hammer out an agreement that they could bring to the floor, if not unanimously, then say by a 15-to-1 margin or something like that. I mean they actually made all those kinds of arrangements often through long and very painstaking kind of markup writing sessions.

Scott Segal: Well the House vote in '90 was like 400 and something to 2, to 10 --

Frank O'Donnell: Something like that, I mean, these are the kind of things that at the committee level everything got worked out. They didn't try these kind of backdoor stunts, like this alleged attempt to do Rule 14 or one of these other kind of backdoor moves, that I think is going to be doomed to failure. They actually sat down and tried to work out any kind of differences and right now the situation is, as Scott pointed out, very polarized. I mean, Senator Inhofe is known for some pretty florid statements. He pretty much said we're gonna have it done my way or the highway and as Senator Carper pointed out that's a highway that's sure to be gridlocked because the lack of outreach to try to do anything and I think that there is no urgency to do this. There's sort of an artificial kind of deadline that I can't fathom frankly, about saying it's gotta be done by March or something like that. I mean I don't even see why there's a reason for that. The current law is in effect. It doesn't sunset. We're making progress. The law is good and as long as we enforce it we're gonna keep on making more progress. I don't know about the lawsuits that Scott mentioned. Mercury, I think they will be sued because the EPA has acted illegally and the Inspector General pointed out that they doctored the report at the request of political appointees --

Scott Segal: She certainly knows doctored reports.

Frank O'Donnell: And I'm told it came directly from the White House that James Connaughton's fingerprints are all over it. I hope at some point somebody puts him under oath and actually asks him about that, because I think it would be very interesting.

Colin Sullivan: We're just about out of time, but speaking of James Connaughton, is he going to be the next EPA administrator? Do you have a prediction on that?

Frank O'Donnell: He sure wants to be from what I hear. You know, he may be a lightning rod. I think there's some people that think you might be a good thing if he went there because he would bollix it up so badly it would paralyze the agency and point out how badly it's being run. I don't know that's going to happen or not.

Scott Segal: I guess as far as the new administrator is concerned it's a tough call and this administration is famous for keeping their appointments very close at hand and then only at the last minute letting people know exactly what's going on with appointments. They've got a good guy in on an acting basis right now, Steve Johnson. I think Jim Connaughton, I don't know whether Jim Connaughton would, is going to be appointed, but I will tell you, that I, my observation of the guy is, he has a passionate belief in environmental policy. He works very well with people on both sides of the aisle and he's a very strong environmental leader for this country, whether he stays as chairman of the President's Council on Environmental Quality or whether he becomes the EPA administrator.

Colin Sullivan: OK, we're going to have that be the last point. Scott Segal, Frank O'Donnell thank you both for joining us today. Join us tomorrow for another edition of OnPoint. Until then I'm Colin Sullivan for E&ETV.